The Bank of England has been utterly and consistently wrong on inflation: stupidity or dishonesty?

A year ago, the Bank of England was predicting that inflation would now be around one per cent. This morning, we learned that the Consumer Prices Index had risen in January to four per cent, and the Retail Prices Index – which more accurately reflects how rising prices feel to most of us – to 5.1 per cent. These figures will almost certainly jump again next month, as the one-off effect of the January sales wears off, and the full impact of the higher VAT rate is felt.

Who has the better record so far: the Monetary Policy Committee or the Rest Of The World? This blog has been arguing for months that printing more money while holding interest rates artificially low was bound to lead to an inflationary surge. So has everyone else. It seems you have to be a professsional economist not to grasp this basic verity.

Mervyn King first came to public notice in 1981 when he was one of 364 economists who attacked Margaret Thatcher's decision to control the money supply more strictly. He was, of course, spectacularly wrongon that occasion, and he is repeating precisely the same mistake 30 years later.

Or perhaps it isn't a mistake. Perhaps the Bank of England has simply reached the view that, in the absence of meaningful spending cuts, the only way to get rid of the government's debt is to inflate it away – that is, to expropriate every saver in the country. If so, let them at least have the courage to admit it.